compensation fraud among employees is a game nobody
wins. Every claim has an impact on an employer’s
history, and costs related to fraudulent claims – in
excess of $5 billion each year according to government
statistics – are passed on to the insureds, directly
impacting their premiums.
increase in state mandated workers’ compensation premium
gets passed on to a company’s goods and services costs,
or is pulled from dollars paid out in employee wages.
For agents, an
insured’s loss history comes into play by making it
difficult for them to offer a sound, affordable policy
to service their client.
compensation fraud can take many forms, and AmTrust
Financial Services’ Don Houser, national director of the
company’s special investigators unit, said the National
Insurance Crime Bureau estimates one in 10 property and
casualty claims nationwide have some element of fraud in
“The number of
instances is trending upward, and that’s largely because
there’s a heightened awareness of insurance fraud among
insurance companies, employers and the general public,”
How can you, as an
employer, best guard against employee workers’
compensation fraud? Follow these four guidelines as a
sound business practice.
claim right away.File
your state paperwork immediately to initiate the
claim documentation process, particularly when and
where the injury allegedly occurred, and send the
employee right away to your preferred medical
provider to document the injury.
document witness testimony.It’s
critically important to talk to other employees who
may have witnessed the injury. Not many people today
work by themselves, so it’s likely somebody saw it.
A lack of documentation increases the suspicion of a
Go to the
few workplaces don’t have internal video today. If
it’s an unwitnessed or questionable claim, preserve
the video as critical evidence in your case. It can
help document or refute what’s claimed.
you suspect fraud, report it to the adjuster or to
the insurer’s special investigations unit or fraud
hotline, which can be done anonymously. The insurer
resolve and address will investigate and help the
compensation insurer can be a valuable resource for an
employer with suspicions of fraud. Insurers commonly
offer training for identifying fraudulent claims,
reviews and investigations of suspected claims, and
detailed reports to the appropriate authorities. Utilize
these resources to help eliminate instances of employee
workers’ compensation fraud at your workplace.